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Retirement plan benefit and employment tax limits for 2017

October 31, 2016

Overview

2017 Benefit Limits

The Internal Revenue Service and Social Security Administration have announced the various retirement plan benefit and employment tax limits for 2017. In many cases, including in regard to 401(k) deferrals, the limitations will not change for 2017 because the increase in the cost-of-living index did not meet the statutory thresholds that trigger their adjustment. However, other limitations will change because the increase in the index did meet the statutory thresholds.

The limits for 2017, as compared to those in effect for the current year, are set forth below. The limits that have changed are printed in bold.

Retirement Plan Limits

2016

2017

Limits on benefits and contributions:

401(k) & 403(b) plans, elective deferral limit

457(b) plan, total contribution limit

Age 50 catch-up contribution limit

Defined contribution plan, total contribution limit

Defined benefit plan, annual accrual limit

---

$18,000

$18,000

$6,000

$53,000

$210,000

---

$18,000

$18,000

$6,000

$54,000

$215,000

“Highly compensated employee” status

$120,000

$120,000

Annual compensation limit

$265,000

$270,000

“Key employee” officer status

$170,000

$175,000

SIMPLE plans:

Elective deferral limit

Catch-up contribution limit

---

$12,500

$3,000

---

$12,500

$3,000

IRAs

Contribution limit

Catch-up contribution limit

---

$5,500

$1,000

---

$5,500

$1,000

Social Security Limits

2016

2017

FICA wage base

$118,500

$127,200

Earnings test thresholds:

Before normal retirement age

Year of normal retirement age

---

$15,720

$41,880

---

$16,920

$44,880

Maximum monthly benefit

$2,639

$2,687

Health Savings Accounts

2016

2017

Annual HSA contribution deduction limit

Self-only coverage

Family coverage

Catch-up contribution

---

$3,350

$6,750

$1,000

---

$3,400

$6,750

$1,000

Out-of-pocket spending limit

Self-only coverage

Family coverage

---

$6,550

$13,100

---

$6,550

$13,100

Minimum annual deductible

Self-only coverage

Family coverage

---

$1,300

$2,600

---

$1,300

$2,600

Health Care FSA

2016

2017

Annual salary reduction limit

$2,550

$2,600

Qualified Transportation Fringe Benefit

2016

2017

Maximum monthly qualified parking benefit

$250

$255

Maximum monthly qualified transit pass benefit

$250

$255

For further information or questions regarding the 2017 benefit limits, please contact Wally Miller at 541-686-3299 or wmiller@schwabe.com.